I don’t honestly see how they can fail to bring Gen-III to market. I mean, I see no technological reason. They have plenty of money to get it done. What barriers would they need to break down to make it happen?

Well they have promised a 200 mile car that they sell for $35,000. The 60kWh Model S has a 208mi EPA rating and sells for over $71,000. Therefore they are promising to cut the price in half and still offer the same range and deliver the car in three years.

Nobody else has even come close to anything like this. The LEAF costs less 20% less ($28K) but offers only about 40% of the promised 200 mile range.

This is a MUCH greater task then the challenges of creating the Model S and I really doubt it they will do it. What I’m expecting is a car that Tesla claims goes 200 miles but gets a rating of 150 miles or so and ends up costing $40,000 AFTER the federal tax credit. This will still be a very compelling car and will probably sell well. However the 200 mile Gen 3 for 35k before incentives will be as real as the 160 mile Model S for $49,000 that we were promised for years.

Musk has said publicly that the Gen III car will start at $35,000 BEFORE incentives. Might the price creep up to $36,000-37,000 by the time it’s introduced? Sure, it’s possible, but that’s still before incentives.

As to the 200 mile range of the car, I agree, the EPA will probably rate it at around 176 miles, which is enough to get the job done, and again, put all other automakers to shame. Even if GM does have a 200 mile battery by then, they will find a way to screw it up. They will put it in the most unlikely vehicle and sales will falter. Look at the way they market the Volt.

I can’t believe all the people here saying Tesla can’t do it. The same thing was said about the Roadster and the Model S. Does anyone here really think that, in 2016, Elon Musk is going to get before a camera and tell the world that, “I know we promised you an affordable car next year, but we just can’t do it”? Elon has said technically, they could do it today. Everyone forgets that Tesla is still a small company. They do not yet have the people needed to design 5 cars at once, nor do they have the manufacturing capacity to build 500,000 cars a year. This all has to be built from the ground up. As of 2013, Tesla has the will, but not the means. The other OEMs have the means, but not the will.

Tesla is building the means. When they get there, they will have both. Maybe, MAYBE, at that time, the other OEMs will awaken from their stupor, but I wouldn’t want to bet on it, and I sure wouldn’t bet against Musk.

Start-up with a single, low-volume product:
– 1 product paying for a lot of development: start-up costs for factory, service centers and stores; learning curve; deliberately trying costly new technology over known existing methods
– high per-unit operating costs
– hard to negotiate cheap deals with suppliers
– per-unit bespoke part costs high
– Minimum manufacturing cost is high: by necessity car must be high end so can’t cheapen it much

If they produce a volume vehicle, even at low end of luxury market, mostly using technologies already developed for Model S:
– lower per-unit fixed costs
– re-use of knowledge gained in Model S/X development
– lower per-unit development costs
– better deals with suppliers
– cheaper cells and batteries?
– vehicle sold at lower margin

Volume is power. The gap from $71,000 to $35,000 is much smaller than it appears.